Online retailer fails in judicial review challenge over revocation by council of certificate of lawful use

A High Court judge has rejected a judicial review challenge by online retailer Ocado over a London borough’s decision to revoke a certificate of lawfulness of an existing use or development (CLEUD) for a site on an industrial estate and near a primary school.

The case of Ocado Retail Ltd, R (On the Application Of) v London Borough of Islington [2021] EWHC 1509 (Admin) related to units A-D on the Bush Industrial Estate in London N19.

In 2018 property company Telereal entered into negotiations with Ocado for a lease of the units. The online retailer was seeking a distribution centre in the Islington area where it could store food at chilled temperatures, process customer orders and organise scheduled deliveries. It was important to the company to be able to find suitable B8 premises from which it could operate 24 hours a day.

It was a condition of the negotiations between Telereal and Ocado that the premises would have a suitable planning consent allowing for a use, which included B8, a "click and collect" facility and 24-hour use. Telereal said that it would obtain a CLEUD for that purpose.

The case put on behalf of Telereal to Islington Council in its application for a CLEUD was that BT had used units A-D for B8 purposes from 1992 to 2013, although not to full capacity in the latter part of that period. Between early 2014 and early 2017 Royal Mail leased the premises for warehousing and since then they had been marketed for that same purpose.

The application was presented on the basis that units A-D had constituted a single planning unit throughout that entire period and that once the premises had been used for B8 purposes for a 10-year period in breach of condition, the use right thereby obtained had not subsequently been abandoned. On that basis it was contended that it did not matter whether B8 activities had continued to take place physically up until the date on which the application for the CLEUD was made.

The application was determined by an officer acting under delegated powers. On 26 April 2019 Islington granted a CLEUD in respect of Units A-D for a B8 use. The accompanying Delegated Report essentially accepted the information and approach presented in Telereal's application.

On 4 November 2019 Ocado entered into an agreement for the lease of units A-D relying upon the CLEUD which had been obtained.

On 11 November 2019 Ocado submitted a planning application to Islington for the carrying out of various improvements to the premises. Unlike the application for the CLEUD, this was the subject of consultation with landowners and occupiers in the vicinity.

It attracted objections from Concerned Residents of Tufnell Park ("CRTP"), a group comprising a number of members of the public living in the vicinity of the industrial estate who were opposed to Ocado's use of units A-D near the local primary school. They became aware of the grant of the CLEUD and took advice on whether it could be challenged.

On 23 April 2020 CRTP sent a letter to Islington enclosing a bundle of documents mainly relating to the planning history of the estate. They asked the local authority to exercise its powers under s.193(7) of the TCPA to revoke the CLEUD on the grounds that Telereal's application had contained statements which had been "false in a material particular" or that "material information" had been "withheld." The letter carefully explained the particular respects in which the group maintained that those conditions were satisfied.

On 1 June 2020 Islington wrote to Ocado and Telereal enclosing the material received from CRTP, stating that there appeared to be grounds for revocation of the CLEUD and giving the recipients an opportunity to make representations on the matter.

Telereal and Ocado contended that there were no grounds for revocation. Paragraph 1.8 of a Note by Telereal's consultants stated that, in reliance upon the CLEUD, refurbishment and fit out works costing over £2.3m had been carried out, but without any more detail or clarifying who had borne those costs.

On 7 August 2020 Islington wrote to Telereal and Gerald Eve (for Ocado) responding to points which had been made, stating that the conditions for exercising the power of revocation appeared to be met, but giving one further opportunity for representations to be made. Telereal and Ocado's solicitors sent separate replies on 20 August 2020. No complaint was made about the procedure followed by Islington.

On 13 October 2020 Islington revoked the CLEUD pursuant to s.193(7) of TCPA 1990. That decision was accompanied by a Delegated Report authorised by the council's Director of Planning and Development.

Relying on decisions in the High Court, Nicholson v Secretary of State for the Environment (1998) 76 P&CR 191 and Ellis v Secretary of State for Communities and Local Government [2010] 1 P&CR 21, Islington decided that the law required a breach of condition to have continued for at least 10 years up to and including the date of the application for the CLEUD. "Even if there had been a continuing use for B8 purposes for a 10-year period ending at some earlier date, any lawful right then acquired had been lost because the occupier did not continue thereafter to use the application site for that purpose. Telereal's contention that the lawful use right for B8 purposes had not been abandoned was irrelevant to satisfying a legal requirement that the use should continue in order for that use right to subsist." [Mr Justice Holgate’s emphasis]

On 20 November 2020 Ocado issued its claim for judicial review. It advanced the following grounds of challenge (ground 6 was withdrawn):

1. Islington erred in law by deciding that s.193(7)(b) of the Town and Country Planning Act 1990 does not require a withholding of material information to have been deliberate;

3. Islington erred in law by proceeding on the basis that an accrued right relating to a breach of planning condition legitimised by s.191(3) is lost if that right does not continue to be exercised;

2. Islington's conclusion that false statements had been made, or material information withheld, was inconsistent with its acceptance that those statements (or omissions) had been made on the legal basis set out in the application. Viewed in that way it could not be said that any such statements were false or that any material information had been withheld;

4. Islington erred in law in concluding that the false statements and withheld information they identified were material to the correct identification of the planning unit for the site to which the s.191 application related;

5. Islington erred in law in concluding that the false statements and withheld information they identified were material to whether the B8 use had been abandoned;

7. In exercising its discretion as to whether to make the revocation order Islington failed to take into account material considerations.

Mr Justice Holgate dismissed the challenge. In relation to ground 7 he said: "Public confidence in CLEUDs must extend to the reliability of the information put forward by an applicant to support the grant of a certificate. That was a matter which Islington plainly had in mind in paragraph 8 of the Delegated Report. Telereal obtained a certificate to which it was not entitled on the basis of the information it provided and withheld."

The judge also noted that in the event that the claim failed, it might be open to Ocado or Telereal to consider making a further application for a CLEUD relying upon more detailed material and addressing criticisms made in the revocation process.

“If that application were to be refused, an appeal to the Secretary of State could be made under s.195. However, any entitlement to a CLEUD would have to be considered by Islington as at the date of any fresh application, not 15 January 2019,” the judge said.

In response to the ruling Islington Council tweeted: “The High Court has today dismissed Ocado’s claim for judicial review of Islington Council’s revocation of a lawful development certificate for a site on Bush Industrial Estate.

“We are pleased with today’s decision, and will now examine the judgment in detail.”

The Nocado campaign run by CRTP said it was “delighted and relieved” at the ruling. It added: “The result of this landmark judicial review carries significant implications for communities nationwide facing similar serious public health concerns with the rise of online retail depots.”  

Natasha Cox, parent of the affected school and campaigner, said: “Today is a landmark victory for common sense and the rights of communities. The verdict of Mr Justice Holgate sets a rightful precedent for prioritising children’s health over the growth of online deliveries.  There is a place for distribution centres but it is not a skipping rope away from primary school classrooms.”

An Ocado spokesperson said: “We are disappointed with today’s judgment. Our proposals for the Bush Industrial Estate are to build the greenest and quietest grocery facility in the UK with a 100% electric van fleet. We remain committed to the Islington community, where we delivered to one in six households in 2020, and will continue to look at how we can deliver a better service to the Borough and significantly reduce our emissions.”